R K Associates provides computer-based accounting services. Many accounting tasks have been simplified with the help of computer-based software. An Enterprise resource planning (ERP) system is commonly used for a large organisation and it provides a comprehensive, centralized, integrated source of information that companies can use to manage all major business processes, from purchasing to manufacturing to human resources.
Accounting information systems have reduced the cost of accumulating, storing, and reporting managerial accounting information and have made it possible to produce a more detailed account of all data that is entered into any given system.
We as a service provider, relieve you from the day to day maintenance of books of Accounts. We offer to keep & maintain books on your behalf at cost effective fees.
Various laws of India have prescribed the requirement of maintenance of books of accounts. Section 128 of Companies Act 2013 prescribes as follows:
“Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting.”
Various regulatory authority like IRDA, TRAI, SEBI, RBI have also prescribed their requirements.
There is famous proverb in Hindi which translate as “first write then pay”. Every transaction which take place need to be recorded so that any future dispute maybe avoided. Initially businessman used to record their transactions at single entry system or at their own discretion. By the time, recording methods have changed. The most preferred accounting system now-a-days is double entry system. Double entry system has legal backing as governments and regulatory authorities prefer it.
Apart from above, Section 44AA of Income Tax Act 1961 has prescribed the requirements of maintenance of books of accounts which covers wider range of business entities under it.
(1) Every person carrying on the Legal, Medical, Engineering, Accountancy or Interior Decoration or any other profession as notified by CENTRAL BOARD OF DIRECT TAXES (CBDT) are required to maintain such books of accounts & other documents as may enable the Assessing Officer to compute Assesses total income in accordance with provisions of this act.
(2) Following are the persons who are required to maintain books of accounts: -
(i) Person carrying on business or profession if his total income exceeds Rs.1,20,000 or his total Turnover or Gross Receipts in the business or profession exceeds Rs.10,00,000 in any of the 3 years immediately preceding the previous year.
(ii) Where the business is newly setup, if his total income is likely to exceed Rs.1,20,000 or his total Turnover, Gross Receipts likely to exceed Rs.10,00,000.
(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee u/s 44AE or 44BB or 44BBB and assessee has claimed his income to be lower than the profits and gains so deemed to be the profits and gains of his business.
(iv) where the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year.
Rule 6F: Books of Account to be maintained:
Every person carrying on Legal, Medical, Engineering or Architectural Profession or Profession of Accountancy or Interior Decoration or Film Artist or Authorized Representative if his Gross Receipts exceeds Rs.1,50,000 in all the three years immediately preceding the previous year or
Where the profession has been newly set up in the previous year his gross receipts are likely to exceed Rs.1,50,000 in that year.
BOOKS TO BE MAINTAINED
The following books of accounts and documents are required to be maintained : -
ü Cash book
ü Journal
ü Ledger
ü Carbon copies of the bills & receipts issued by theperson in relation to sums exceeding Rs.25
Original bills and receipts issued to the personin respect of the expenditure incurred.
PERIOD FOR WHICH THE BOOKS & OTHER DOCUMENTS TO BE MAINTAINED
The above books of accounts and other documents shall be kept and maintained for a minimum period of 6 years from the end of relevant assessment year. If an assessment in relation to any assessment year has been reopened u/s 147 all the books of accounts and other documents shall continue to be kept and maintained till the assessment so reopened has been completed.
PLACE WHERE BOOKS TO BE MAINTAINED
The books and documents shall be kept and maintained at the place where the person is carrying on the profession or where there is more than one place at the principal place of business.